Egypt says sales tax hikes on hold for two weeks -paper

CAIRO

CAIRO Dec 26 (Reuters) - Egypt's government will not
implement a series of planned tax increases until it completes a
dialogue with different parts of society, Al-Mal newspaper has
quoted Planning Minister Ashraf al-Araby as reaffirming.

The government on Tuesday began a series of meetings with
businessmen, trade unions, non-governmental organisations and
other groups to persuade them of the need for austerity measures
to resolve the country's financial crisis.

Earlier this month it announced increases in the sales tax
on a range of goods and services, only for President Mohamed
Mursi to suspend them within hours as the country prepared for a
referendum on a contentious new constitution.

The unpopular measures are deemed necessary to secure $4.8
billion Egypt is seeking from the International Monetary Fund.
The government has asked the IMF to delay by a month a meeting
it had scheduled to approve the loan to allow it to seek more
support for the moves.

But the administration is under increasing pressure to take
steps to shore up the country's finances, with some citizens
worried enough to withdraw their savings from banks and exchange
them into hard currencies while its international credit rating
has also been cut.

"The government will not implement the increases earlier
than in two weeks, after the end of the social dialogue that the
government is currently holding," al-Mal quoted al-Araby as
saying.

On Tuesday, the ministers of finance and investment met the
members of chambers of commerce and industry and the investors'
union in the first round of its social dialogue, al-Mal said.

Al-Araby said Egypt needed $14.5 billion to plug an external
finance gap through the end of June 2014. In addition to the
IMF, the government has been negotiating for loans from the
World Bank, the African Development Bank and other international
organisations.

He said the economy was passing through a crisis that it
would overcome as soon as the country's political polarisation
came to an end.

The austerity measures include increases on the sales tax on
goods and services that range from alcoholic beverages,
cigarettes and mobile phone calls to automobile licences and
quarrying permits.

Al-Ahram newspaper quoted Finance Minister Mumtaz al-Saeed
on Tuesday as saying the higher sales taxes would be applied on
21 types of goods and services.